03 Oct Young Turk – Nikhil
1) Could you explain a little about your background?*
Since 1989, I have been involved in the Savings and Insurance business. I was in the 10th standard at that time. My parents were in the business of Small Savings, PPF and LIC. I started by helping them in fill forms and visit the post office for work related matters.
It all started with my desire to help my parents as my mother would go often have to the post office walking. The Post Office was at a distance of 4 kms cost of transport to and fro was Rs.4.Those days Rs 4 mattered to us and therefore I would volunteer to walk down to the Post Office. That was I was happy to give some relief to my mother.
This was the phase of real learning. This is was the phase which taught me how one had to deal with people. Those days the person at the Post Office would take a bribe of Rs. 5 for doing the work which he was meant to do. He would straight away deduct Rs. 5 or 10 from our commission. But that was life and I am thankful to get a taste of this early on in my life. This helped me to understand and deal with people. I am thankful to this early experience which prepared me for the future.
2) What prompted you to select this business?
I was doing a job at Delhi after completing my Master’s in Business Management.At that time the Post Office Small Savings and the LIC business was simply not appealing to me. I felt I would lose my dignity in doing that kind of work.I was however pretty convinced about equity as I was an investor since my college days.Even back then I believed in the buy and hold philosophy. My first stock purchases were UTI Bank (which turned into Axis Bank) and HDFC Bank respectively both of which I am still holding.I never wanted to do LIC business as we had to to beg for business. I had barely worked for 7 months in Delhi when my mother asked me to return to Anand to start something of my own. Being a part of a small and well knit family I was happy to return and start my mutual fund business in 2004. I am glad that my mother had involved me in her Insurance and Post Office Savings business and the early experience did help me immensely to get started.
3) What were the strategies that made your company successful?
My parents would always tell that one must first think about the customers’ needs and then the organisation’s need and since then our philosophy and strategies have focussed on being customer centric. This principal has resulted in a Win Win Situation for me.
The next thing that has contributed to our success as an organisation is to have opted for “goal” based selling right from 2005. The idea of ‘goal” based selling struck me when I had visited the ‘Chairman club’ member Convention at Pune arranged by LIC. In this Convention Datacomp presented their “Magic Mix” Software that created readymade plans for Retirement and Child Education. This was a turning point for me that directed me in the direction of Goal Based Selling.
Fearless and continuous efforts in prospecting played a huge part in our success. When we started our business we did not hapve many contacts. We had to start from scratch. We would go through yellow pages directory daily in the morning from 9am to 10 am and thereafter take appointments for the following day. I would then start my day by meeting purchase managers in different companies. What I had learnt in my job in Delhi is what I immediately implemented in Anand. I would setup at least 6 calls every day. Even today I do at least 4 to 5 calls on a consistent basis. To be frank, I love to do client calls and enjoy spending time with both current and potential clients. I feel since I enjoy the experience of meeting people most of them over time become my friends
4) How would you explain the key ingredients for success in this industry in the past and how it has changed ( if at all it has ) for the future?
Customer centric approach is the foundation of our success and this timeless formula neither has changed nor will change. If we sincerely focus on customer needs the rest will be taken care of
5) How do you react to the regulatory changes that have been taking place from time to time?
Regulatory changes are always good and healthy for long term and I have taken them positively all the time. I do agree in short term it does give pain. But this pain forces me to re-think and tweak my business model. Therefore “uncomfortable zones” bring the best out of me and keeps me from getting complacent. Accepting the fact that “change” is a part of business is extremely important if one has to succeed.
6) Do you think for entrepreneurs of your size ( 250 cr. AUM) it is time to think of inorganic growth also?
I still believe that organic growth based on customer centricity and hard work will help us grow further and have not thought of inorganic growth as yet. Inorganic growth comes with its share of challenges like adapting with different mindsets and culture which can cause huge challenges. I still believe there is a lot of opportunity for organic growth itself.
7) What do you see as the future business models for the Advisory business?
Future will be of Technology but technology alone cannot overcome investor’s needs which is beyond the realm of ‘returns’ and logic. People need a lot more guidance in the area of behaviour, emotions and feelings. Professional guidance and coaching will continue to play a very important role in wealth creation of Individuals and Families. Technology however has a big role to play in execution. Hence it is very important that financial advisors adopt technology to scale up their business. Currently MF business is in an infant stage and has a great potential to grow and my conviction is that good financial advisors equipped with good technology would me most needed to penetrate financial knowledge and financial products deep into rural Indian market.
8) What human traits are required for one to succeed in this business? Can “fee” based advisory be a reality? If yes how one should prepare oneself for charging fees?
Fee based model is certainly a possibility provided we are committed to provide appropriate advisory keeping clients’ interest foremost. We need to be truthful and transparent with all our clients, add value their financial lives and help them to transform their social status as well.
If above is achieved the client himself will not leave without paying our fees. However in order to get investors to pay, we must enhance our own skills. This can be achieved if we invest in ourselves by attending quality training programs for both self as well as business development.
9) What is the role of technology in this business and what would be your guidance for the community?
In today’s environment people have become mobile. Even the customer we are serving today in our city may move to some other city and here only technology can ensure that the customer is retained. Secondly using technology it is possible to market and serve customers from another geography. In that sense we can say, “geography is now history”. It is imperative for us to learn and acquire every single business growth technology and if we cannot learn ourselves we should either hire someone to operate technology or outsource it to some agency.
In a city like Anand we operate our business through a 100% online platform of MFU. We have stopped manual transaction for the past 3 years. It is only because of our technology that a team of 3 back office employees we are able to do 467 transactions in a single day. Really amazed and thankful to my phenomenally efficient team who has given me the motivation to achieve more and more.
10) What would be the impact of ‘Direct’ especially from platforms like Paytm etc?
Would you feel fine taking ONLINE advice from a doctor? At least I would be very uncomfortable talking to an inanimate machine for medical guidance. I have no doubt in my mind that human intervention cannot be wished away. However we will also need to learn and leverage technology which in turn will help us scale our business. It is clear to me that our main product is our advice which comprises of coaching, engaging and managing human psychology.
“Paytm” kind of technology service may create new customers but is unlikely to be able to manage a huge customer base. Those who see themselves as very intelligent or see investment advisory as being extremely easy may dabble with such platforms.In my view investors can be either be intelligent or Wealthy.
Paytm and other platforms cannot ensure financial freedom and guidance. All they ensure is ease of transaction which is only a small part of the overall service proposition. I do not see ‘Direct’ & ‘Paytm’ as my competitors. To me they are ‘doors’ that will open up to new clients and provide us the opportunity to present our value proposition as well as ‘fees’ to them.
Let me give you an example to explain this point more clearly. People may watch a Salman Khan movie, get motivated and join a gym, start exercising without guidance and end up in pain and failure. Likewise people who will take to investing using Paytm without any guidance too will end with a similar misadventure. Like in the case of the gym one should take the guidance of a personal trainer likewise here too an investor must take the guidance of an Advisor.
11) Overall what is your bird’s eye view of our economy and the financial advisory industry?
I was bullish about India, I am bullish about India and I will continue to be Bullish about India as I firmly believe our Economy and country is full of ‘problems’ and ‘issues’ and ‘problems’ and ‘issues’ are the seed for both economy and business growth. The investment intermediary industry is still in an infant stage and has huge growth potential.
12) Lastly what is your vision for yourself and your success mantras?
I personally love L&T as an company. Even we may not know who owns the company but still the company is working on its own fundamentals and ethics. Similarly I have a vision for my company to transform the lives of thousands of people by turning their dreams into goals. While it may take 20 years to 30 years to transform lives, I may or may not be there. Therefore I am building a system which will automatically manage the client’s goals and transform his life with or without my personal intervention.
- Customer focus and hard work
- Make mistakes and learn from them. Never repeat
- Learn from the mistakes of others. It saves precious time.
- Never chase revenue. By default it will come to you if you solve the customer’s problem
- Accept changes positively and change yourself
- Invest in yourself through different training programs and reading
- Use time effectively
- Treat your employees like your extended family and always be with them.
- I firmly believe law of Karma of doing good for others and rest will be taken care automatically